- 01PFS: $438m pre-tax NPV, 69% IRR; payback <17 months.
- 02Resource: 32.7Mt; tin +58%, tungsten +163%, maiden silver.
- 03Targets FID 2027, first production mid-2028.
Sky Metals (ASX: SKY) has outlined a pathway towards tin, tungsten, and silver production at its Tallebung project in New South Wales after completing a pre-feasibility study and upgrading its mineral resource.
The PFS estimates a pre-tax net present value of $438 million and an internal rate of return of 69%, using its base-case commodity price assumptions.
It envisages a 7.3-year open-cut operation with pre-production capital costs of $138.8m and capital payback in less than 17 months.
With resource expansion drilling under way and approvals progressing, Sky is targeting a final investment decision during 2027 and first production in mid-2028.
The company held $14.5m in cash and cash equivalents at 30 September after spending about $2.26m on exploration during the quarter, supporting its continuing drilling and development work.
Larger Resource Base
The updated Tallebung mineral resource estimate stands at 32.7 million tonnes grading 0.16% tin equivalent, containing 36,800t of tin, 1.14 million metric tonne units of tungsten trioxide and 9.94 million ounces of silver.
Compared with the previous estimate, contained tin increased 58% and tungsten 163%, while the silver inventory represents a maiden resource for the project.
The PFS considers only 66% of the total MRE, with its mine life constrained by the higher-confidence measured and indicated material rather than the full mineral inventory.
A further 19.9Mt of inferred resources was excluded from the PFS mine plan, providing a defined target for conversion drilling but no guarantee of an extended mine life.
The proposed operation would process 3Mtpa and produce averages of 2,040t of tin, 31,700mtu of tungsten trioxide, and 315,000oz of silver annually.
Rapid Capital Payback
Under the PFS base case, the operation is forecast to generate average annual EBITDA exceeding $115m over the initial mine life.
Using the higher spot-price assumptions specified in the study, pre-tax NPV rises to about $1 billion, IRR increases to 130% and forecast capital payback falls below nine months.
These higher returns are price-dependent scenarios rather than guaranteed project outcomes, with the PFS also identifying opportunities for further optimisation.
Sky has launched a reverse circulation drilling campaign of more than 150 planned holes to expand the resource and upgrade inferred material to measured and indicated classifications.
Initial diamond drilling identified shallow high-grade tin-tungsten-silver mineralisation, including an interval of 17 metres grading 0.70% tin, while assays remain outstanding from holes containing visible coarse wolframite.
Approvals and Development Timetable
The project is proceeding through the New South Wales State Significant Development process, with environmental impact assessment work progressing towards a targeted mining approval in late 2027.
Sky plans to appoint a definitive feasibility study consultant, continue metallurgical testing and progress financing and offtake discussions alongside further project optimisation.
Exploration work is also planned at Theirman Mines, approximately 20 kilometres from Tallebung, after surface sampling returned tungsten trioxide grades up to 7.44%.
At Doradilla, the company intends to begin geophysical surveying ahead of exploration drilling, while its existing conceptual tin exploration target remains distinct from a mineral resource.
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